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Malaysia’s external debt last year was RM257.2 billion – Najib

Posted on May 13, 2012, Sunday

KOTA KINABALU: Malaysia’s external debt last year stood at RM257.2 billion, Prime Minister cum Finance Minister Datuk Seri Najib Tun Razak said.

Replying to questions from Senator Datuk Paul Kong Sing Chu and Datuk Abdul Rahman Bakar in Dewan Negara, Najib said that the debt encompassed loans that the government obtained from the private sector outside the country.

“The national debt that encompasses the Federal Government external debt, Non-Financial Public Enterprise and private sector is 30.2 per cent from the Gross Domestic Product (GDP),” he said, adding that the government’s total debt that comprised external and internal sources, was RM456.1 billion or 53.5 per cent from the GDP, as end of last year.

Of the total, a large portion of the government’s debt was made up of internal debt of RM438 billion while the remainder, of external, at RM18.1 billion.

Najib said that the low “hutang dalam negeri” (national internal debt) is in line with the Government’s policy that priorities internal loan which has high liquidity, lower loan cost and minimum foreign exchange risk.

On the Federal Government debt sources, the national internal loan was obtained from the issuance of Treasury Bill, issuance of Government Investment (TPK), Government Securities, Housing Loan Group and Sukuk Savings issuance and Sukuk 1Malaysia.

“The holders of the instruments are made up of financial institutions, insurance companies and social security institutions such as EPF and Socso,” he said.

Najib added that the government’s external debt was obtained from international capital market via issuance of global Sukuk and project loan from multi-lateral institutions such as World Bank, Asia Development Bank and Islam Development Bank and bilateral loan in the form of foreign currencies such as US dollar, Yen, Euro dollar, Canadian dollar and Dinar.

Najib also stressed that the government is always committed to ensure the repayment of the loan is carried out according to schedule.

“To date, the government has paid all its debt accordingly,” he said.

He said this is made possible from prudent debt management approach where the loan is only made after taking into consideration the government’s capability to settle it.

Last year, he said, the payment for debt services was RM17.7 billion or 9.7 per cent from the management expenses.

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